Lending Advertising Regulations And Guidelines

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

Advertising in the Lending Industry more so than most industries has very strict guidelines which fall under Regulation "N".  As strict and clear as the Lending Advertising Regulations And Guidelines are, some Lenders still manage to walk a very fine line in complying with them.

I am not going to go into Regulation "N" in detail in this blog.  I will provide links at the end for those who want more detailed information.  The purpose of this blog is to just give a brief description of what constitutes Advertising for Lenders which falls under Regulation "N" as well as:

  • The Truth In Lending Act (TILA)
  • Fair Housing Act
  • Equal Credit Opportunity Act

Advertising has many definitions as it is defined in different ways depending on the Industry.  But Advertising in its simplest most basic form is simply the process of taking a product or service from an idea to the point of delivering the product or service to the end user.

Marketing and/or Advertising the product or service to the end user consists of four parts:

  • Identifying the product
  • Establishing a price for the product
  • Getting the product to the end user
  • Creating a method or strategy to bring awareness of the product to the end user

It is the last point above that Advertising falls mainly under, and in the Lending Industry, it applies to the way (Advertising) the Loan Product or Service is presented in any form designed to bring attention to the Lender and/or Loan Product or Service.  Examples of Advertising which would fall under this definition, and therefore fall under  Regulation "N" and the other Acts I mentioned above would be:

  • Printed messages in newspapers, magazines, brochures, flyers, etc.
  • Radio, TV, or any other similar media announcements
  • Any form of electronic message such as e-mails
  • Websites
  • Social Media such as BLOGS, Facebook, Google+, Linkedin, ActiveRain, Twitter, etc.
  • Direct Mail
  • Displays and Billboards
  • Solicitations on the phone or in person
  • ATM messages

This list is not all inclusive, but it gets point across. However, not every contact between the Lender and the Borrower is considered a form of Advertising.  For example:

  • Contact with the Borrower for the purpose of following up with them, providing cost estimates, or negotiating a specific transaction
  • Information provided to other business entities on interest rates, and loan terms
  • News articles
  • Materials for none solicitation purposes, such as market research, and education
  • Information on transmitted on existing accounts

The above would not fall under the Regulation "N" Lending Advertising Regulations And Guidelines, as long as they do not include, or attempt to include a sales component or solicitation in any form.

As mentioned at the beginning of this blog, as strict and clear as the Lending Advertising Regulations And Guidelines are, some Lenders still manage to walk a very fine line in complying with them.  What still remains to be put in place is what governments fails to do with many of the guidelines and regulations government creates.  Regulation "N" is lacking the enforcement component to make sure this Regulation "N" is complied with.

 

Regulation "N" Links

Federal Register - Mortgage Acts and Practices-Advertising (Regulation N)

Electronic Code of Federal Regulations

Bureau of Consumer Financial Protection — 12 CFR Chapter X, Part 1014 — Mortgage Acts and Practices—Advertising (Regulation N)

Federal Register / Vol. 76, No. 242 / Friday, December 16, 2011 / Rules and Regulations

 

 

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam,# Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who is licensed in #CT, #RI, #MA, #NH, & #FL and can assist you with all your #FHA, #Conventional, #VA, #USDA, and #State Bonded Progam #mortgage needs in #CT, #RI, #MA, #NH, & #FL. George resides in Middlesex County which includes #Middletown, #Old Saybrook, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or souto@snet.net

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Rainmaker
1,234,201
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

This is a topic that I've found myself discussing more and more often, as of late George Souto.  Especially as it pertains to online efforts and social media.  The correct way of referring to ourselves must be complied with, for example.  While I understand the need for rules and enforcement, it really does place an enormous amount of stress on the small or individual Originator trying to build their business via marketing.  And it's not always easy to comply with or hit a constantly moving and changing target. 

Gene

Mar 02, 2016 01:35 AM #1
Rainmaker
1,501,643
Beth Atalay
Cam Realty and Property Management - Clermont, FL
Cam Realty of Clermont FL

Hi George, with an increased advertising efforts on SM, this is a topic we should all visit time to time. Great post!

Mar 02, 2016 01:47 AM #2
Rainmaker
3,125,560
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Nothing gets easier or less complicated with time, does it, George? Not uncomplicated on the real estate side these days either.

Mar 02, 2016 04:08 AM #3
Rainmaker
679,919
Nicole Doty - Gilbert Real Estate Expert
Zion Realty - Gilbert, AZ
Broker/Owner of Zion Realty ZionRealtyAZ.com

Title agencies have really cracked down on their dual marketing campaigns they used to do with lenders and real estate agents. 

Mar 02, 2016 05:24 AM #4
Ambassador
1,769,790
Noah Seidenberg
Coldwell Banker - Evanston, IL
Chicagoland and Suburbs (800) 858-7917

Excellent information for clients and explains many guidelines people may not be aware of.

Mar 02, 2016 05:47 AM #5
Rainmaker
2,034,050
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Fort Worth, TX
Selling Homes Changing Lives

We're all being regulated to death, especially when it comes to marketing. I've been informed I can't use the word Value. Oops.... does this count against me?

I hope you get featured - you deserve it again!!!!

Mar 02, 2016 06:20 AM #6
Rainmaker
1,675,413
Larry Johnston
Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC - Elkhart, IN
Broker,Friends & Neighbors Real Estate, Elkhart,IN

Hi George Souto ,  I remember in Real Estate school, we spent quite a lot of time on what we could and couldn't say, or how we could say it, or include in our advertising.  Actually, it was a very interesting segment of our education.

Mar 02, 2016 06:21 AM #7
Ambassador
2,788,648
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi George - Interesting information. I have noticed that fine line you mention, and have seen what appears to my untrained eye to be a blatant crossing of it on occasion. I'm not surprised there is little enforcement.

Mar 02, 2016 06:23 AM #8
Rainmaker
2,265,005
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning George. If you think that the banking commissions don't monitor blogs, they do. Being licensed in eight states and audited by all of them, all have asked me about my blogging. Fortunately all is good the way I do it.

Mar 02, 2016 06:47 PM #9
Rainmaker
4,797,386
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Hi George.  I can remember when some lenders used to post very misleading advertising about rates that made these regulations necessary.  Though, some still skirt the intent.

Mar 02, 2016 08:37 PM #10
Rainmaker
4,101,315
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

George, you are very knowledgeable on the rules and regulations on how to advertise and stay out of trouble!   

Mar 02, 2016 09:25 PM #11
Rainmaker
558,927
Maria Gilda Racelis
Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington - Manchester, CT
Home Ownership is w/in Reach. We Make it Happen!

Hi George: Some regulations are ludicrous but some are necessary to protect the general public.

 

The first link does not work George. :(

Mar 02, 2016 09:40 PM #12
Rainmaker
3,825,790
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good evening George Souto ,

I sure hope to see this post featured! We are being regulated to death!! I agree there are some good ones which are necessary but we are so over the top with may new regulations!

Mar 03, 2016 11:12 AM #13
Rainmaker
3,265,885
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

Sounds a bit like the Realtors code of ethics..no one enforces that either...sigh.

Mar 03, 2016 07:31 PM #14
Rainer
370,003
DEANNA EARLY - - ( NMLS # 268590 )
American National Bank & Trust - Smith Mountain Lake, VA
Highest Ranked Mortgage Loan Originator Virginia

We lenders are constantly under a lot of scrutiny because of evil doers in the past.   I welcome the rules of conduct to maintain professionalism and fairness in our field.   You won't get any argument from me about following the rules George Souto.   Thanks for sharing with our colleagues. 

Mar 05, 2016 02:12 PM #15
Rainmaker
2,394,979
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

Creating new laws and rules to be followed is much easier than monitoring them. Because of that fact, many people bet the odds they will not be caught not conforming.

Mar 10, 2016 09:31 AM #16
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